Strategic Interaction in the Fight Against Terrorism

Strategic Interactions in the Fight against Terrorism Maastricht University School of Business and Economics Maastricht, 12 December 2011 Raphael Mankopf, RM ID number: i6033138 Study: International Business Course code: EBC1009 Economics & Business Group number: 39 Tutor’s name: A. Kuczynski Writing tutor’s name: K. Richardson Writing Assignment: Main paper Maastricht University School of Business and Economics Maastricht, 12 December 2011 Raphael Mankopf, RM ID number: i6033138 Study: International Business Course code: EBC1009 Economics & Business Group number: 39 Tutor’s name: A.

Kuczynski Writing tutor’s name: K.

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Richardson Writing Assignment: Main paper 1. Introduction Since the existence of communities, states and governments, there have always been minority groups, who disagree with decisions and circumstances in society. Terrorism occurs when these groups act violently to influence a target audience and to change behaviour and opinions. In history the dimensions of terrorism have changed and the fear and awareness of the population concerning terrorism has increased. Transnational terrorism causes most of the actual international conflicts and lead to the attacks of /11 and to a global war against terrorism (Garrison, 2003).

The suicide attacks on the World Trade Centre in New York could probably be regarded as the most catastrophic and biggest terrorist attacks in history, which forced governments to develop strategies for combating, but first and foremost, for avoiding terrorist attacks. The decision made by the US government after 9/11 caused ten years of war, costing the USA 1. 283 trillion dollar (Belasco, 2011), and many lives. When taking such a decision many options and strategies must be evaluated.

This paper states, that game theory can be used by governments to make decisions in the fight against terrorism.

As it is necessary to gain a basic knowledge about terrorism, the reason for terrorism, its objective and its impact on the attacked object will be outlined first. A simple game, which models the strategies of the USA and the EU in the fight against terrorism, will show how game theory helps to find the optimal strategy. This also requires an evaluation of the model on its appliance to the real life situation. Finally the problems and friction will be analysed and a conclusion will be drawn. . The definition and impact of terrorism There are many different approaches to define terrorism, but some facts are found in all definitions.

Targets of terrorist attacks are non-combatants, who can be governments, the population, politicians, or infrastructure. Terrorist attacks involve aggression but are not supposed to result in a military defeat of the enemy (Viktoroff, 2005). The purpose of the actual attack is not, to accomplish a specific political goal, but instead is aimed to influence the target group to obtain a change in behaviour that will serve the terrorists’ interests.

The origin of terrorism and the actual reason why terrorism occurs can be very different. The general motives are religion or the attempt to influence politics.

The aim of the actual attack is to weaken and frighten the target group, which could not be done with a military attack. For example the attacks on 9/11 have frightened the whole world and the damages caused by the attack were immense (Wenzlaff, 2004). Therefore, terrorists evaluate how they can achieve the highest damage with the lowest effort. Governments instead have to evaluate how to fight ransnational terrorism in an effective way. If terrorism is actively and aggressively fought by eliminating personnel, resources, and infrastructure, a proactive policy is followed.

By starting a war against terrorism in Afghanistan after 9/11 the American government decided to follow a proactive policy. Many other countries in the world simply improved security checks at airports, increased security staff in public places, developed better monitoring systems and improved emergency procedures to decrease the probability of a terrorist attack and to harm the effect in case of an attack.

These measures belong to a reactive strategy. 3. Strategic Interactions in a global fight against terrorism Facing international terrorism all governments have to take a decision, whether to follow a proactive policy or to remain peaceful following a reactive strategy. In Figure 1 a game is played in which the EU and the USA face the decision to either follow a proactive strategy and fight the terrorists or only follow a reactive strategy and improve security.

The two players are supposed to choose their strategies simultaneously. EU EU | Proactive| Reactive|

Proactive| 22/2| -2/4| Reactive| 4/-2| 0/0 NE| USA USA Table 1 adapted from ” Terrorism and Game Theory”, by Sandler, T. , Arce, D. (2003) Simulation ; Gaming, 34, (3) When deciding for a proactive action a benefit of “4” is conferred to every country, because no special country has been attacked. The cost of a proactive action is 6.

In this model the cost for a reactive policy are assumed to be “0”. Due to the global terrorist threat the EU and the USA should act proactively combined. But there is the opportunity for both of them to free ride and follow a reactive strategy.

If one Player decides to follow a proactive strategy, and the other player free rides, the free riding player receives a benefit of “4” while the other receives a benefit of “4” as well, but has to face the costs of “6”. If both players fight terrorism proactively together they both receive a benefit of “2” each, but when both act reactively they each receive a payoff of “0” (Sandler ; Arce, 2003). The USA and the EU both possess the dominant strategy of freeriding and following a reactive strategy.

This leads to the Nash Equilibrium in the lower right corner. The states are also facing a prisoner’s dilemma.

If they would both choose the dominated strategy of acting proactive they would reach a higher payoff of “2” for each player. Still both players decide for the freeriding option, because this saves costs and as long as no state is attacked by terrorists the benefits of fighting do not outweigh the costs. This dilemma indicates the problem, that every state wants the terrorism to be fought, but does not intervene itself because, given the other player’s choice, acting reactive gives the higher payoff. No state will follow a proactive policy and actively fight terrorism until one state is attacked.

If one state has been the target of terrorist attacks the benefit this player will receive changes. EU EU | Proactive| Reactive| Proactive| 6/2| 2/4 NE| Reactive| 4/-2| 0/0| USA USA Table 2 adapted from ” Terrorism and Game Theory”, by Sandler, T. , Arce, D. (2003) Simulation ; Gaming, 34, (3) In this model the USA were victims of terrorist attacks and their benefit of proactive action by themselves changes to “8”. The benefits for the EU of following a proactive action of the USA stay “4”. A proactive action of the EU leads to a benefit of “4” for each state.

A proactive policy costs the acting state 6 and a reactive policy “0”. If both players act proactive it results in a payoff of “6” (8+4-6=6) for the USA and a result of “2” (4+4-6=2). When no player acts proactive the payoff for both is “0”. A proactive action of the USA leads to a payoff of “2” (8-6=2) for the USA and to a payoff of “4” for the EU. If only the EU acts proactively the USA will receive a payoff of “4” and the EU will get a payoff of “-2” (4-6= -2) (Sandler ; Arce, 2003). This leads to a dominant strategy of acting proactively for the USA and a dominant strategy of acting reactively for the EU.

The dominant strategies result in a Nash Equilibrium in the upper right corner. Concerning the fight on terrorism after a terrorist attack in the USA, the EU would rather prefer to follow a reactive policy, because this saves costs and leads in the worst case to a payoff of “0”. The USA instead would favour a proactive policy because they gain a benefit of “8” of this action, while its cost are “6”. When states take the decisions they consider their dominant strategies and the cost benefit principle. This game is an approach, to model the situation after 9/11 concerning the positions of the USA and the EU.

After the attack of the Twin Towers in New York the USA faced the decision of commencing a war on terrorism or just enhancing the security system.

Due to maintaining legitimacy the USA would receive a higher payoff of following a proactive policy individually, than by reacting to the attacks reactively. 4. Evaluation of the Game Theory Model The decisions made after a terrorist attack are extremely complex and can have huge implication on a state. The US decision of following a proactive strategy to maintain their position ended in a global war against terrorism.

Modelling those complex decisions with game theory is very difficult. In the table above there are only two options to choose.

In reality a state could also mix both policies to gain the optimal choice. The payoffs also depend on the method the states use to act proactively and the terrorists’ counteractions. The costs of acting proactively with a military attack and the costs of freezing terrorist’s bank accounts differ (Sandler, 2005). As seen in history, the freeriding option of a reactive policy is not always possible, due to treaties and league.

Thus the European countries supported the USA in the war against terrorism in Afghanistan, even if their dominant strategy might have been to follow a reactive policy. When modelling the situation, the second player was chosen as the EU.

It was ignored that the members of the European Union can decide independently concerning their military policy and that the biggest support in the war against terrorism in Afghanistan was given by the NATO (Archick ; Gallis, 2008). Also the second result of the payoff “0/0”, when both players choose to act reactively is quite arguable.

In the case of no active actions against terrorism the attacks might continue, which will result in much higher costs. The result in the first game is a good approach to the real world. Before the attacks by the Islamist terror group al-Qaeda on 9/11 no huge proactive actions have been taken against the terrorists. This is a prisoner’s dilemma, because actions against terrorism in foreign countries could have been taken in advance, but it is expensive and more difficult to justify aggressive actions against those terrorists, as long as attacks only occur in their country of origin.

But after the terrorist attacks, the situation changed and a proactive action of the USA was inalienable. This model can be a simple explanation why the USA started a war against Islamist terrorists after the attacks of 9/11. 5. Conclusion The war against terrorism is very complex and therefore it is incredibly difficult to take decisions. But decisions have to be taken and game theory can help governments to make the best decisions for their own country and all other nations.

The game, which was introduced in this paper, was a simple example of how game theory can be used to make decisions in the fight against terrorism.

Game theory can also be applied to the more complex conflicts between terrorists and a government, explaining which option to choose, by using backward induction. This is far too complex for this paper, but should confirm the importance of game theory in the political decisions of war. Politicians have to evaluate different strategies all the time and will sometimes make the wrong decision, even if they apply game theory.

This paper cannot answer the question, if the decision, to start a war against terrorism, taken by the US government was right, because total costs and benefits cannot be evaluated, but the model can explain, that this decision was probably the dominant strategy of the USA. References Archick, K & Gallis, P. (2008).

Nato and the European Union. Congressional Research Service. RL32342 Belasco, A. (2011). The Cost of Iraq, Afghanistan, and Other Global War on Terror since 9/11. Congressional Research Service, 7-5700, RL33110

Garrison, A.

(2003). Terrorism: The Nature of its history. Criminal Justice Studies. 16 (1): 39-52 Sandler, T (2005). Collective versus unilateral responses to terrorism. Springer.

Public Choice. 124. 75–93 Sandler, T. , & Arce D. (2003) Terrorism and Game Theory. Simulation & Gaming.

34 (3) Victoroff, J. (2005) The Mind oft he Terrorist. Journal of Conflict Resolution. 49. 3-42 Wenzlaff, K.

(2004). Terrorism: game theory and other explanations. Bayreuth, Germany: University